How to Remove Your Name from Cibil Defaulter List

If your application has been rejected for a loan or credit card, it is probably because you might have a low credit score which is caused by your poor record of repayments. Banks and other financial institutions do not want to give credit to such defaulters who have a history of missed or late repayments. Moreover, the credit bureau in India i.e. CIBIL basically maintains a list of defaulters which it gathers from its member organizations such as banks and NBFCs. And, if they find a default being mentioned in the credit report, they list you under credit defaulter’s list. And, once that happens, you have negligible chances of availing a loan or credit card. Thus, your name in a defaulter list affects your chances of getting the approval for a loan/credit card easily. So, the only way out here is to remove the default mention in your CIBIL score, if you are a defaulter.

Step 1: Look for Errors

Try to keep a track of your CIBIL score as it is not a difficult task. In fact, you can get your credit report free once in every year, but later on you will have to pay for it. Look at your report carefully and try to evaluate it thoroughly. Look for some details such as gender, name, passport number, PAN, address etc, have entered with errors. Although some of these do not matter, these may also include some errors in accounts, credit card information, identity theft and last, but not the least wrong default payment reports. Moreover, the errors, if found, will give you one solid proof of raising a dispute with CIBIL which is actually a direct way to remove the default from your list.

Step 2: Find the Financial Institution or Bank

Well, in case if step 1 is not helpful, you can use step 2. You need to identify which NBFC or bank actually provided the default information to the CIBIL. Since CIBIL is nothing but just a regulatory authority. So, with the help of knowing this, it will help you with the fast removal of the default.

After you get a letter of acknowledgement from the concerned institution, it proves that the default is erroneous, and it will be easier to remove the default entry. You can also write to the bank as well as CIBIL regarding the faulty entry, if a bank or NBFC is denying to help or cooperating with you.

Step 3: Settlement

If you are the one who has defaulted officially, and the entry on the default is correct, it’s better for you to consider settling down the things with the bank or NBFC which had sent your report to CIBIL. In such a scenario, you need to make the settlement letters and ensure that the default entry is removed, failing which the default will automatically affect your financial prospects.

Step 4: Pay Dues on Time

When it comes to ensuring the removal of the default entry, it is important for you to pay off all the dues you own and make sure that all your future payments are made on time. So, you need to understand that whenever you are delaying a payment, it will affect your score very badly. Thus, to avoid this situation, all you need to do is set up payment alerts in your mobile or have auto debit feature in your bank account. With the help of doing so, you will be able to ensure the regular payment.

Step 5: Spend Wisely

When it comes to spending with your credit card, you need to make sure that it should be within your approved limit. If you overspend regularly on your limit, it will automatically alert the lenders, and ultimately indicate that you have insolvency issues with you.

In a nutshell, it would not be wrong to say that you need to ensure that the default issue does not occur in the first place as it is a positive step that will give you the assurance that your score is good always. Try to avoid using too many credit cards, budget wisely and keep control on your expenses in order to get off from the defaulter’s list permanently.

Ways Through Which Your Name Could Appear as a Defaulter

Credit Related Default

This simply happens when you do not pay your loan or credit card EMIs, on time which also includes missing the payments. In this case, you need to clear all the pending EMI payments, at the earliest. Credit bureaus, generally publish a monthly report to ensure that you clear the pending dues, & prevent your name from getting re-tagged as a ‘Defaulter’.

Incorrect Reporting/Mistake

The mistakes happen from your credit rating agency such as wrong Credit Cards Details, Ownership – Accounts that aren’t yours, but in your credit file, Late Payments – Reports of late payments in your credit file, when you paid on time or you may be a victim of identity theft.

Human Error

Check if your Name, Gender, PAN and Address could have been entered in the wrong format. If so, then contact the credit bureau to get it rectified. Provide valid documents as proof. In case, the issue is due to human error at the credit institution, report the same to the institution, & attach a copy of the report. Once rectified by the institution, get an acknowledgement of the same, and send it to the bureau for updating. The error could also be due to identity theft or fraud; where someone has used your details to avail a loan/credit card, and defaulted.

How to Improve Your Credit Score and Avoid Getting on the Defaulters List?

The information you need regarding the CIBIL defaulter’s list is the Control Number (CN). Every time a bank or a financial institution asks for your CIBIL report, a CN will be generated. A CN is a nine-digit number that makes your credit report easily available and traceable.

If you want to improve your credit score or remove your name off the list, you must find out your credit information report (CIR). This will enable you to check any advance/ credit` you may have defaulted on. From there, you can take steps to rectify the situation so that you can remove your name from the defaulter’s list.

One thing you can do immediately is to avoid having multiple credit cards. Too many credit cards will imply that you are highly in the need of credit, and that the chances of defaults are quite high.

Avoid applying for credit cards and loans unnecessarily. Avoid pre-approval of loans too. If you have too many credits already running, pay them timely, instead of applying for a fresh loan. Greater the number of enquiries in your CIBIL report, more it will take you towards the lower bracket of CIBIL score.

You must also check whether the outstanding loan amount and Days Past Dues (DPDs) reflecting in your CIBIL report reflect the true story.

Last but not the least, make all payments related to your credit outstanding on time. Forget what you have done in the past and start making equated monthly installments (EMIs) payments on time. This will improve your credit score, even if it is not in a very good shape currently.

The most effective way of keeping your CIBIL score at 750 is to use credit only if mandatory and carefully as well as make timely repayments.